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Opening Hours Decision and Competition in the Motor Vehicle Inspection Market

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Abstract

This paper examines the effect of competition on a firm's choice of opening hours in the motor vehicle inspection market. Competition affects the incentive inspection firms face when choosing opening hours, which influences the probability that consumers find service time that best matches their preferred time. We use 2SLS analyses to resolve the potential endogeneity of market entry decisions. Using a detailed monthly firm-level panel data for all inspection firms in Sweden, we find that increased competition, measured using both the number of firms in a geographic market and average distance to nearby competitors, leads to expanded opening hours. The probability that inspection firms offer services on weekends also increases with local competition.

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  • Habte, Osmis, 2017. "Opening Hours Decision and Competition in the Motor Vehicle Inspection Market," Working Papers 2017:20, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2017_020
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    More about this item

    Keywords

    opening hours; competition; non-price competition; entry; motor vehicle inspection market;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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